Depozitarul Central launches new settlement service for euro transactions

September 19, 2017

As of September 18th, 2017, Depozitarul Central will provide its clients with the TARGET2 –Securities (T2S) settlement service for the euro transactions concluded at the Bucharest Stock Exchange for euro denominated financial instruments.

Depozitarul Central completed the technical development of the RoClear system needed to facilitate the new service and the Financial Supervisory Authority approved through the decision no.1291/ 14.09.2017 the amendments of Depozitarul Central Rulebook, previously endorsed by the National Bank of Romania, which were developed in order to set the regulatory framework applicable to the settlement in euro of the transactions concluded within the trading systems. An important aspect of this project was the enhancement of the SWIFT communication services in relation with the participants by adapting the messages currently used for the settlement in lei at the market practice of the T2S Platform. Also, a conversion mechanism was implemented between SWIFT messages used in the communication with participants (ISO 15022 format) and T2S platform specific messages (ISO 20022 format).

“Depozitarul Central uses for the euro settlement the most advanced settlement platform in Europe, TARGET2-Securities, this process is to be carried out in the central bank’s money, therefore the related risks are reduced. We are convinced that by implementing the settlement rules and practices of the mature European markets, we are making a significant contribution in increasing the trust and attractiveness of our market for foreign investors, familiar with the T2S procedures. Also, the rules implemented for the euro settlement on the T2S Platform, will be gradually extended to the domestic currency settlements. This project represents another important step for Depozitarul Central in the alignment process to the international standards and confirms the institution’s direction to constantly meet its clients and partners demands”, said Silvia Buicanescu, CEO, Depozitarul Central.

Depozitarul Central joined the Pan-European Settlement Platform T2S in June 2015 in the first wave, and in February 2016 implemented the automatic interface through which its own system communicates with the platform developed by the Eurosystem. T2S facilitates post-trade operations by offering harmonized, neutral and easy settlement conditions in the single European currency for most European financial instruments.